Mortgage applications took a turn for the better this week, reversing course from last week’s decline.
The Mortgage Bankers Association indicates mortgage applications increased by 1.5% from the previous week, which saw a 6.4% decrease.
“Last week appears to have been the calm before the storm,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Weaker readings on economic growth caused a slight drop in mortgage rates, bringing them back to their level two weeks ago, but applications overall moved 1.5% higher.”
Although refinance applications for conventional loans slightly dropped this week, Fratantoni indicates FHA refinances increased by more than 22%.
The MBA reports the Refinance Index decreased only 1% from the previous week, remaining 152% higher than the same week one year ago.
However, the refinance share of mortgage activity decreased to 60.8% of total applications, falling from 63.2% the previous week, the MBA said.
According to the MBA, the seasonally adjusted Purchase Index rose 6% this week, while the unadjusted purchase index fell 1% from last week. Nevertheless, activity is still 10% higher than a year ago.
Here is a more detailed breakdown of this week’s mortgage application data:
- The adjustable-rate mortgage share of activity decreased to 5.3% of total applications.
- The Federal Housing Administration share of mortgage apps rose to 10.5% from 9.5% last week.
- The Department of Veterans Affairs share of applications fell to 11.8% from 12.1% the previous week.
- The Department of Agriculture share of total applications moved forward to 0.5% from the prior week’s 0.4%.
- Mortgage interest rates for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreased to 3.73% from last week’s 3.77%.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $510,400) retreated to 3.72% from 3.79% one week before.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.84% from last week’s 3.86%.
- The average contract interest rate for 15-year fixed-rate mortgages fell to 3.18% from last week’s 3.22%.
- The average contract interest rate for 5/1 ARMs slid to 3.22% from last week’s 3.23%.